Extended controversies could further cloud the prospect of legislation seen as market friendly

U.S. stocks traded slightly lower on Tuesday, but were off session lows that were set after Donald Trump Jr. released a chain of emails regarding a meeting in June 2016 to discuss allegedly incriminating information about Hillary Clinton as part of the Russian government's support of his father's presidential candidacy.

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Major indexes had been little changed throughout much of the morning's trading as Wall Street appeared to be holding off on making big bets ahead of key events later this week.

The Dow Jones Industrial Average was down around 13 points, or 0.1%, but earlier had fallen more than 120 points. The S&P 500 lost about 5 points to 2,422. The Nasdaq Composite Index was flat at 6,176, but also had been down solidly before trimming its sudden decline.

The emails with publicist Rob Goldstone show that the son of President Donald Trump was told the Russian government had information that would incriminate Clinton (http://www.marketwatch.com/story/donald-trump-jr-releases-emails-about-his-russian-lawyer-meeting-2017-07-11).

"There are legitimate concerns that something could blow up with respect to the Russian scandal, and that could be enough to temper a market that has been moving up," said Bruce McCain, chief investment strategist at Key Private Bank. "It's fair to think that absent any good news on economic fundamentals or on legislation coming out of Washington, that additional worries about scandal can't help the market."

Wall Street has risen firmly this year, with the Dow and S&P 500 both up more than 8% thus far in 2017. The Nasdaq's advance has been sharper, up almost 15%, boosted by an extended rally in large-capitalization technology shares, a sector that has pulled back recently.

Much of the market's postelection rally has come on hopes that the Trump administration would push through legislation on tax reform and spending that could accelerate economic growth and stimulate corporate profits. Controversies with Russia are seen as making the passage of such initiatives less likely.

See also:Is Janet Yellen still calling the tune in financial markets? (http://www.marketwatch.com/story/is-janet-yellen-still-calling-the-tune-in-financial-markets-2017-07-10)

"Investors may suspect that Donald Trump, Jr., came forward with his meetings with the Russian attorney and released his emails because the FBI investigation may been catching up with him on that issue. The sense was he tried to get in front of it," said Jack Ablin, chief investment officer at BMO Private Bank.

Traders are also looking ahead to the start to the next earnings season. Key companies, including such major banks as J.P. Morgan Chase & Co. (JPM) and Citigroup Inc. (C), are scheduled to report on Friday. By and large, financials are expected to post mediocre trading revenue this quarter (http://www.marketwatch.com/story/bank-earnings-expect-another-meh-quarter-of-weak-trading-revenue-2017-07-10).

Amazon.com Inc.'s stock (AMZN) slipped 0.7%. The online retailer will be in view as its Prime Day promotion is in full swing on Tuesday.

See:6 money-saving tips for Amazon Prime Day--even if you're not a member (http://www.marketwatch.com/story/6-money-saving-tips-for-amazon-prime-day-even-if-youre-not-a-member-2017-07-10)

And read:Amazon is taking away brands' power, throwing another industry into turmoil (http://www.marketwatch.com/story/amazon-is-taking-away-the-power-of-brand-names-throwing-another-industry-into-turmoil-2017-07-10)

Amicus Therapeutics Inc. (FOLD) surged 27% in heavy trading after the Food and Drug Administration cleared the company to submit a new drug application (http://www.marketwatch.com/story/amicus-therapeuticss-soars-on-heavy-volume-after-fda-clears-nda-submission-for-fabry-disease-treatment-2017-07-11) for its Fabry disease treatment.

Halcon Resources Corp.(HK) soared 45% after it agreed to sell its Williston Basin assets (http://www.marketwatch.com/story/halcon-resources-to-sell-williston-basin-assets-for-14-billion-in-cash-2017-07-11)to a unit of Bruin E&P Partners for $1.4 billion in cash.

Other markets: Most Asian markets closed with gains (http://www.marketwatch.com/story/asian-markets-rise-driven-by-tech-stock-gains-2017-07-11) on Tuesday, while European stocks (http://www.marketwatch.com/story/european-stocks-stuck-in-tight-ranges-as-traders-wait-for-yellen-2017-07-11) were largely lower. Oil futures (http://www.marketwatch.com/story/oil-prices-build-on-rebound-amid-production-cap-talk-for-libya-nigeria-2017-07-11) moved down after Monday's rally (http://www.marketwatch.com/story/oil-prices-rebound-as-some-see-last-weeks-selloff-as-overdone-2017-07-10). Gold futures edged up, and a key dollar index inched higher.

Economic news: A June reading on small-business sentiment arrived before the opening bell, showing a decline (http://www.marketwatch.com/story/small-business-sentiment-falls-as-economic-expectations-slide-sharply-2017-07-11). It's the fifth month in a row without an increase.

On the Fed front for Tuesday, Fed Gov. Lael Brainard, speaking at a conference held at Columbia University (http://www.marketwatch.com/story/brainard-supports-balance-sheet-drawdown-but-on-fence-over-rate-hikes-2017-07-11), indicated she supports the central bank beginning to reverse its $4.5 trillion balance sheet but wasn't persuaded on more rate increases after that.

At 1:20 p.m. Eastern, Minneapolis Fed President Neel Kashkari is scheduled to take part in a Q&A at the Minnesota Women's Economic Roundtable.